While typically slow to embrace change, insurance companies are widely adjusting to a digital marketplace and focusing on digitally transforming from risk assessment to claims processing. There are many digital tools available to enhance any insurance company, including machine learning, robotic process automation and more. Discover what digital transformation looks like in this industry and how traditional insurers can adopt digital solutions and benefit from them as well. At the end, we will go over the five major benefits of digital transformation for the insurance industry.
What is Insurance Digital Transformation?
Digital transformation is essentially adopting digital tools as part of your business practices in several areas in order to perform better as a business. This will look slightly different for every insurer, depending on which technologies or emerging technologies you think it is best to invest in. Options include live chat, machine learning, artificial intelligence, predictive analysis, automated documents, and more.
Here are a few ways digital transformation may look for you:
- Automatically generating many of the documents your staff create.
- Automating underwriting rules and adopting faster work processes.
- Keeping critical information on the cloud, allowing faster access to it.
- Using live chat and other automated tools to interface with customers in real-time.
- Automated billing, invoice data capture and communications.
Why is Digital Transformation Important in Insurance?
The digital transformation of the insurance industry is important to tap into the efficiencies and benefits of technology. In part, insurers need to digitize in order to meet customer needs and expectations. However, there are also many other benefits of digital tools that companies may overlook, including greater accuracy, efficiency, and lowered costs in several areas.
What are the Three Approaches to Digital Transformation?
There are three main approaches an organization can take to insurance digital transformation:
- Empirical results: These companies only adopt new technologies with strong case studies that demonstrate measurable improvement in a process or in revenue.
- All-inclusive adoption: These companies are open to more risk and will adopt emerging technologies before they are necessarily proven.
- Incremental: These companies identify several areas for digital transformation and make the change one at a time.
Five Key Benefits to Digital Transformation for Insurance Companies
As your insurance agency makes its digital transformation, you’re going to notice a range of important benefits. Here are a few ways that cloud technology improves the overall operation of insurance agencies:
1. Predict and Mitigate Risks
In insurance, you rely heavily on data and analysis about potential risks. Technology can assist you in creating more robust analyses and predictions across different risk types, including insurance fraud. It can also help you reduce your own company’s risks or liability. For example, cloud-based computing can help reduce the risk of a server shut-down, help you monitor for IT breaches, and more.
2. Reduce Your Costs
Many digital solutions, from cloud accounting to automated document creation can significantly reduce your costs by lowering labour hours needed to complete any given task. You can reduce overtime payments or hire fewer employees with many digital solutions. You may also have a healthier cash flow when you invest in subscription-based digital solutions over those that require you to purchase them outright.
3. Improve Customer Experience
Many digital advances are about transforming the customer experience. Give customers faster answers to their questions, develop your relationship with them, allow staff to handle more customer files at once and give customers access to more data. Apps, customer experiences management software, AI chatbots and other options can all help you improve your customer’s experience and relationship with your brand.
4. Maximize Staff Skill
Digital tools like document management software, cloud computing, and automated computing take many of the boring, rote tasks away from your staff. And that’s a great thing because they will have significantly more time they can spend on other tasks that require their skill and talent. You’ve hired great people in your insurance agency, give them the ability to do their job, their real job, most effectively.
5. Develop or Maintain a Competitive Advantage
The insurance world may not have been as quick to digital transformation as some other industries. However, many more companies are adopting several digital tools and investing in emerging technologies from insurance-focused tech companies as well. In order to keep up with the competition, you need to invest in technology. You may even gain an advantage if you can adopt an important digital tool first.
Discover Digital Solutions for Insurance Today
MES offers digital solutions that can help your insurance company stay ahead. Reach out today to discuss them.